Food Processing Sector Sector Definition Manufacture of food - PowerPoint PPT Presentation

Food Processing Sector

Sector Definition Manufacture of food products and beverages (food processing):  the transformation of raw ingredients, by physical or chemical means into food , or of food into other forms.  Food processing combines raw food ingredients to produce marketable food products that can be easily prepared and served by the consumer (International Food Information Council Foundation).

FP Sector Outlook  Over half the world’s urban population will be in emerging economies.  Demand for food in emerging markets expected to rise because of population and income growth [and urbanization] and are likely to adopt a rich country diet — more calories, protein, and processed foods (Goedde et al., 2015)  Consumers are increasingly health conscious: governments are tightening standards for food production/more stringent quality and safety requirements.  Exports of processed food are expected to make up 12 per cent of total exports by 2025 (Fareastern Agriculture, 2015).  Asian food demand expected to outpace local food production, leading to higher imports of meat and processed foods rather than traditional staple grains. ( A review of market data concerning Asian Food and beverage markets) 3

Patterns and Trends in Trade  Destination of Processed Food exports: 58 countries Malaysia, Thailand China, EU_France, Poland, Africa)  Very few rice millers exporters (14 firms);4 food processing firms in SEZ  Small % of total exports : rice export volume (2015): 0.46 M tons , $210 Million; Informal Sector: $512 Million (2.3 Million MT) Thailand and Vietnam  Strict SPS requirements

Estimates of Animal, Food and For. Product Imports by Cambodia, US$ thousand, 2001-201 2001 2009 2011 Food & Live Animals Sugar/sugar prep/honey 49,352 194,810 292,634 Miscellaneous food products 19,924 100,838 183,984 Animal feed ex un-milled cereals 1,501 59,287 121,400 Cereals/cereal preparation 22,403 61,714 106,353 Dairy products & eggs 16,726 48,943 73,128 Vegetables and fruit 12,620 51,560 55,154 Live animals except fish 214 46,526 52,109 Coffee/tea/cocoa/spices 1,358 11,488 32,757 Fish/shellfish/etc. 7,716 23,555 29,071 Meat & preparations 387 2,346 26,750 Non-Food Products Natural rubber 1,898 968 3,572 Oil seeds 311 658 2,010 Wood and wood products 48 601 137 Nat. gum/ resin/ pharm. plants etc 143 26 20 Source: Cambodia Trade Integration Strategy 2013- 2018 and Trade SWAp Road Map 2013-2018

Agro-Industrial Products are among the Priority Sector of Cambodia (IDP 2015-2025) • New industries markets with high value-added products: machinery/mechanic/electronic/electric equipment/ transport assembly and natural resource processing • Drugs and medical equipment production, construction materials, packaging equipment for export, furniture manufacturing and industrial equipment, etc. • Agro-industrial products • Supporting industries serving regional production chains linked with either global markets

Industry share in employment (ADB Country Diagnostic Study 2014) :  50% garments  25% construction  10% food processing;  13% other manufacturing

FP Total Persons Engaged Manufacture of grain mill products Manufacture of sugar Distilling, rectifying and blending of… Manufacture of macaroni, noodles,… Manufacture of bakery products Manufacture of soft drinks Manufacture of malt liquors and malt Manufacture of starches and starch… Processing of meat Manufacturing of fish and molluscks 0 10,000 20,000 30,000 40,000 Regular Employee

Food Processing (FP) Number of Establishment Manufacture of grain mill products Manufacture of sugar Distilling, rectifying and blending of… Manufacture of macaroni, noodles,… Manufacture of bakery products Processing of meat Manufacture of wines Manufacture of starches and starch… Manufacture of soft drinks Manufacturing of fish and molluscks 0 5000 10000 15000 20000 Establishment

FP Annual Sale (million US$) Group Sale Manufacture of soft drinks 52,922 Manufacture of grain mill products 13,442 Manufacture of macaroni, noodles and similar 10,302 farinaceous products Processing of food and vegetables 3,955 Manufacture of malt liquors and malt 3,765 Distilling, rectifying and blending of spirits 764 Manufacture of wines 764 Manufacture of vegetable oils and fats (except 696 palm oil, coconut oil and corn oil) Processing of dairy products 370 357 Processing of meat

FP Export Value Manufacture of grain mill products Manufacture of starches and starch… Manufacture of sugar Manufacture of wines Processing of food and vegetables Processing of fish and molluscks Manufacture of vegetable oils and fats… Manufacture of malt liquors and malt Manufacture of macaroni, noodles,… Manufacture of bakery products $0 $50 $100 $150 $200 $250 $300 Export Value (Million)

FP Registration Registered Not registered Manufacture of cocoa, chocolate and… Manufacture of soft drinks Processing and preserving of fruit and… Manufacture of bakery products Processing of meat Manufacturing of fish and molluscks Manufacture of starches and starch… Manufacture of wines Manufacture of grain mill products Manufacture of macaroni, noodles,… 0% 20% 40% 60% 80% 100% Registered Enterprise

Top Ten FP Products (Based on the 6 Criteria) Product Rank Manufacture of grain mill products 1 Distilling, rectifying and blending of spirits 2 Manufacture of soft drinks 3 Manufacture of sugar 4 Manufacture of malt liquors and malt 5 Manufacture of macaroni, noodles, couscous and similar farinaceous products 6 Manufacturing of fish and molluscks 7 Manufacture of starches and starch products 8 Manufacture of vegetable oils and fats 9 Manufacture of wines 10 Ranked based on: (1) No. of Establishments; (2) Registration; (3) Person Engage; (4) Annual Sale; (5) Export Value; (6) Emerging Industry

Strengths of the Manufacturing Sector  Enjoys some benefit from the market access to the US, EU, Canada and Japan through trade agreements  Food, beverage and tobacco industries slightly increased (GDP) due to the government policy of promoting export particularly rice products (CDC, Economic Overview of Cambodia).  Cambodia is centrally situated for easy access to major Asian economies  Quick and easy business & investment licensing registrations (RADIUS)

Issues Specific to FP (KII and Literature Review)  Most industries are family-based with lack of entrepreneurship and limited use of technology limiting its competitiveness in the international markets.  High logistics cost (RADIUS); Expensive cost of transportation; the waterways and railways transport (which is cheaper than land transportation) are not well-developed  Myanmar emerging as low cost rice exporter and competitor with duty-free status  High energy cost (CAMFEBA, 2013). The technology for alternative energy such as gasifier is still not viable  Lack of skilled technicians on rice milling technology. Rice millers has to import Technicians from Thailand and Vietnam  Expensive cost of certification (AMRU KII)  Outmoded machines (e.g. chippers for cassava) (Value Chain Info Unit, 2016)  No warehouses to store rice to be exported to other countries

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